SHUMAIL SIKANDER Versus COLLECTOR OF CUSTOMS

ORDER

SYED SARDAR HUSSAIN SHAH (CHAIRMAN/MEMBER JUDICIAL).--- This order will dispose off Customs Appeals Nos. K-183 and 157/2018, passed by the Additional Collector of Customs (Adjudication), Karachi against Order-in-Original No.437/2017-18 dated 05-12-2017, as both these appeals arise out of common question of law and facts, therefore, are proposed to be decided through this single judgment.

2. Since these two (02) appeals are based on similar facts and question of law, therefore, it is needless to reproduce facts of each case separately, hence for reference the fact of Appeal No.K-183/2018 are taken into consideration for decision, wherein, brief facts of the case as reported by the MCC-Preventive, Custom House, Karachi vide Contravention Report enclosed with their letter No.ASO-125-A/2017-qus dated 20.09.2017 are that a credible information was received from NCA UK, Islamabad's Office that an organized crime group is involved in shipping stolen / theft vehicles from UK to Pakistan. All these vehicles are of high value and are imported under the garb of Transfer of Residence Facility provided under the passenger's Baggage Rules. Pursuant to the information received from NCA policy decision was taken by the administration of the Collectorate that stolen goods being a notified item of Negative List under Serial No. 43 of Appendix "A" of the Import Policy Order, 2016 should be monitored at gate out once the clearance Collectorate completes all of its formalities relating to clearance of these vehicles. The impugned one Unit Silver Color Range Rover Jeep bearing Chassis No. SALWAZEE7EA316576 being reported as theft / stolen by the NCA from UK and the same is being imported into Pakistan under the garb of Baggage TR facility and Passport of passenger hailing from Middle East is being used to show legitimate import. Despite of the fact that manifest of the vessel shows that the goods are imported from UK a Bill of Lading showing port of loading as Dubai was presented, accepted and processed for clearance. Another document used for the clearance of this vehicle is an undertaking was submitted by the customs agents on behalf of the importer which was accepted by the clearance Collectorate. This undertaking clearly mentions that all the documents relating to import of this impugned vehicle i.e. one Unit Silver Color Range Rover Jeep bearing Chassis No. SALWAZEE7EA316576 were given to them by one Mr. Noman bearing CNIC No. 42301-0890441-3. There is another document attached and presented at the time of clearance i.e. Vehicle Export Certificate No. 510170003101 dated 2nd May, 2017 issued by the Ministry of Interior, UAE. This document shows that the vehicle was registered in UAE on 2nd May, 2017, though according to the Bill of Lading submitted by the owner Mr. Noman clearly show that the impugned vehicle was aboard the vessel on 25th April, 2017. Scrutiny of all the documents given by the owner Mr. Noman and presented by the Customs Agent M/s. Sea King Agencies for clearance and the documents received thrdugh NCA UK reveal that the vehicle was shipped from UK on 25th April, 2017 in container number TTNU5925491 under seal number 3634513 and this is the seal number which is also mentioned on the switched / changed / swapped Bill of Lading bearing No. JP/3773/29932-2 dated 25th April, 2017 issued at Dubai by M/s Global Transit Logistics. The fact that original Bill of Lading of the shipment is available and the seal number is the same which originated from UK and reached Karachi, all the documentation with regard to registration of vehicle in UAE its Sales Receipt in UAE the Bill of Lading issued from UAE are resultantly fake, forged and are used to hoodwink Customs and to get the goods fraudulently cleared by hiding its original port of shipment because of the fact that the vehicle is reported stolen in the UK. As per Bill of Lading issued from the Port of Shipment by the Shipping Line M/s. Hapag Lloyds, the vehicle was shipped in the name of M/s. Overseas Transit Agency (Pvt.) Limited, Ellander Road, Karachi and not in the name of Muhammad Yousuf or anyone else. This vehicle was gate out on 07.06.2017 after completion of all clearance related formalities by the respective clearance Collectorate. Since the vehicle was reported stolen against crime number 5605093/17 of the UK Police, therefore, the Customs Agent M/s. Sea King Shipping Agencies was contacted and where abouts of the vehicle were asked. In response, Mr. Muhammad Haseeb Mirza, Proprietor of M/s. Sea King Shipping Agencies informed that the subject vehicle has been handed over to the representative of Mr. Noman and he is unaware of the where abouts of this vehicle. Efforts were made to locate the vehicle and after hectic efforts it transpired that the impugned vehicle is in possession of one Mr. Shumail Sikandar. Accordingly Mr. Shumail Sikandar was contacted to present himself in the office of the Anti-Smuggling Organization enabling him to afford an opportunity to clear his position viz a viz. However, Mr. Shumail Sikandar informed that he has filed a C.P. No. D-4191/2017 before the Honorable High Court of Sindh in the subject matter and a notice has already been issued in this case. The case was Fixed before the Honorable High Court of Sindh on 6th of July, 2017. However, before the date of hearing Mr. Shumail Sikandar filed a contempt of court application before the Honorable High Court of Sindh which was also fixed for hearing on 6th of July, 2017. The case was finally taken up on the 13th of July, 2017 where the Honorable High Court of Sindh has passed the following orders:

"The officer and the department must act only in accordance with law. Learned Counsel for Petitioner states that the law required that show cause notice be issued to the Petitioner. If such notice is issued by the department, the Petitioner shall fully cooperate with the same, appear before the departmental proceedings and file his reply and not attempt to delay or frustrate the proceedings. For the time being adjourned to a date in office but since the vehicle is with the Petitioner the Petitioner must maintain status qua with regard to the vehicle and not part with possession of the same or create any third party interest thereon."

Since the documents retrieved from the WeBOC system are evident of the fact that the Bill of lading has been switched / swapped / changed to hide the actual place of shipment, the undertaking given in this case by the Customs Agent M/s. Sea King Shipping Agencies mentions that all the documents pertaining to import of this Range Rover were given to them by Mr. Nauman bearing CNIC No. 42301-089041-3. In view the directions of the High Court of Sindh at Karachi the case making agency prepared Contravention Report and forwarded to this Collectorate for Adjudication and to afford an opportunity to all concerned including the owner Mr. Shumail Sikander to clarify their position in importing a stolen vehicle and its clearance in Pakistan thus violating the provisions of Sections 2(3), 16, 32, 48, 79(a), 80, 207 and 209 of the Customs Act, 1969, IPO Regulation at Sr. 43 of Annexure "A" under Negative List, punishable under clauses (i), (8), (9), (14), (26), (77), (78), (81) and (82) of Section 156(i) of the Customs Act, 1969. (Value of the seized vehicle Rs.3,750,277/-, Duty and Taxes involved: Rs. 9,928,3261( deposited) as determined by the case making agency in Contravention Report).

3. The Additional Collector of Customs (Adjudication-), Karachi decided the matter vide impugned Order-in-Original No.437/2017- 18 dated 05.12.2017.

4. Aggrieved of the Order-in-Original No.437/2017-18 dated 05.12.2017, the appellant filed appeal before this Tribunal. Hence the instant appeal.

5. We have gone through the relevant record of the case and heard the contentions of both the parties. The vehicle in question was originally registered at U.K. in the name of Azeem Sattar under Registration No.DU63XOE. The registration carries the chassis number as SALWA2EE7EA316576 and Engine No.13080941141508PS. One Pakistani national residing at Dubai purchased the same vehicle from Azeem Sattar and shipped the same vide Bill of Lading No.JP/3773/29932-2 dated 25.04.2017 and the vehicle was purchased by one Pakistani national Shumail Sikandar, resident of Karachi, therefore, the particulars of the vehicle were endorsed by Pakistani Embassy on the passport of Muhammad Yousaf and was shipped to Karachi vide Export Certificate No.510170003101. The vehicle was shipped from Dubai through Switch Bill of Lading No.JP/3773/29932-2 dated 25.04.2017 as International Trading of Goods are covered by Maritime Law and there are three aspect for shipping the goods in the Maritime Law which are as under:-

(i) Deals with the Carriage of Goods;

(ii) Deals with the Movement of Ships;

(iii) Deals with Pollution in Sea.

6. The mother law for Maritime Law is Carriage of Goods Act and the United Nations refined law of carriage of goods by a United Nation Convention for the carriage of goods by sea, which is called Hamburg Rules. The Hamburg Rules introduced the amendment in the ordinary law. Bill of Lading then called shipped Bill of Lading. Article 15(2) of the Hamburg Rules is reproduced as under:-

"The carrier may amend any previously issued document in order to meet the shippers demand for a "shipped" bill of lading if, as amended, such document includes all the information required to be contained in a "shipped" bill of lading."

7. The Legal Digest at Admiralty and Shipping, which is a Digest issued from Singapore explaining the same as under:-

"Where the switching is performed properly, only the switch set of bills would be in circulation. The originals, having been returned to the shipowners, would have been spent. Given that the practice of switching is sanctioned, it is fair to infer that the switch bills now symbolize the cargo carried under them, are negotiable and must be presented when delivery is claimed. If however, for any reason, the switching is not performed or imperfectly performed, resulting in the circulation of both the original and switch sets of bills in respect of one cargo, the shipowners may, of their own making, expose themselves to potential liability if different indoorsees subsequently compete for delivery."

8. The jurisdiction of each Collectorate has been defined in the Notification No.581(1)/2013 issued under Section 3 of the Customs Act, 1969 stated as under:-

"Appointment of officers of customs.- For the purpose of this Act, the Board may, by notification in the official Gazette, appoint, in relation to any area specified in the notification, any person to be-

(a) a Chief Collector of Customs;

(b) a Collector of Customs;

(c) a Collector of Customs (Appeals);

(d) an Additional Collector of Customs;

(e) a Deputy Collector of Customs;

(f) an Assistant Collector of Customs;

(g) an officer of Customs with any other designation

9. This section clearly specifies the scheme of the Customs Act, and the officers in their area of jurisdiction, which is to be notified by the Board. In this case 02 show-cause notices were issued to the appellant, one by the Collector of Customs (Adjudication) on the report of the Model Customs Collectorate (Appraisement West), Custom House, Karachi on 14.09.2017 and the other was issued on 03.10.2017 by the Collector Customs (Adjudication) on the report of Model Customs Collectorate (Preventive), Custom House, Karachi. The Customs authorities have not initiated further proceedings on the show-cause notice dated 14.09.2017, which was issued on the report of M.C.C. (Appraisement West), Custom House, Karachi and the fate of which is unknown. The show cause notice dated 03.10.2017 issued on the report of M.C.C. (Preventive) does not fall under the jurisdiction of Collectorate of Customs (Preventive), Karachi as the Collectorate of Customs (Preventive) should have passed the same to the concerned Collectorate i.e, the M.C.C. (Appraisement West) and it was not the jurisdiction of M.C.C. (Preventive), Custom House, Karachi to report the matter to the Collector (Adjudication). As per notification No.581(I)/2013 dated 18.06.2013, specifically stated the jurisdiction of the Collector Customs (Preventive) and the allegation in the show-cause notice has not been covered by the powers of the Collectorate of Customs (Preventive).

10. According to the contents of the Show Cause Notice Muhammad Yousuf imported and cleared a stolen vehicle as evidence from Car Status Check Report. Counsel for the appellant stated that, report of theft lodged on 29.03.2017. Contents of the Show-Cause Notice has no concern with the vehicle, as well as with the appellant for the reason that the appellant is a bona fide purchaser. The vehicle was legally and lawfully imported. Representative of the respondent argued that as per record of owner of the vehicle is Mr. Azeem Sattar. The National Crime Agency of UK provided information to the Customs Department that vehicle Chassis No.SALWA2EE7EA316576 was stolen. If this is the evidence of the prosecution which is based on presumption and assumptions as the owner and the record shows that the vehicle was properly Registered in the name of Azeem Sattar. If there is dispute between Azeem Sattar and any other body in UK then, that will be the case of civil nature which has no concern with the present owner. Furthermore, the record of the prosecution shows that the report was made on 29.03.2017 and the shipment was made on 25.04.2017, so how it was possible that the shipment was allowed, when a report had already been registered against the said vehicle.

11. In view of the above the case of the prosecution is of doubtful nature and one should not be penalized on the basis of doubtful evidence and the Show-Cause Notice issued is without jurisdiction and of no legal effect, is vacated. We allow Appeal No.Cus.K-183/2018, dismiss Appeal No.Cus.K-157 and set-aside the Order-in-Original No.437/2017-18 dated 05.12.2017 of the Additional Collectorate of Customs (Adjudication), Karachi.

SA/114/Tax (Trib) ` Order accordingly.